Lately I’ve begun to wonder: has "offset" turned into a swear word? Should I spell it as off***?
I can't understand why, as surely this is part and parcel of net zero - without offsets, there is no netting to zero. But more and more often I hear that offsets should be reserved for when we've exhausted all decarbonisation possibilities, arrived at residual emissions and then it's ok to use them.
But is this logic flawed?
There is a massive flaw in this logic though. To achieve 1.5C degrees by 2050 we desperately need to both decarbonise as fast as possible AND invest in climate solutions, now. It's not one or the other - it's both, and they should be done in parallel, not in turn. Buying offsets is essentially a way to invest in climate solutions that are otherwise not commercially viable (or you'd just invest regularly alongside your assets to receive investment returns). And more often than not, these sort of hard-to-monetise opportunities are nature-based solutions like soil and peatland preservation and restoration, forest and ocean conservation and so on.
A win-win (before it's too late)
Linking with the goals of COP15 where countries have committed to protect and restore 30% of the world's land and 30% of the world's ocean by 2030, surely the financial services sector should be doing all we can to fulfil those targets? Or we will get to 2040/2050 and go: "right, I'm ready to offset and protect the forests" but there's no more forest left to protect any more.
Instead of issuing guidance after guidance, shouting at investors about how bad offsetting is, we should be a lot more balanced and encourage in every way we can the development of high quality, trustworthy offsetting standards so that we can rely on their integrity and additionality. Then we should ask investors to clearly disclose their decarbonisation pathways and their offsetting efforts, and at some point those two would meet at a Net Zero position. The financial sector should coalesce around a call that Chris Skidmore made in his excellent Net Zero review: the UK government should endorse a set of international standards for offsets and set up a regulator for carbon credits and offsets. This will give the market the confidence in moving billions of pounds into much needed areas, supporting not only decarbonisation itself, but also associated biodiversity and social benefits.
We need to turn offsets into a force for good and a badge of honour, not a swear word.
Maria Nazarova-Doyle is head of responsible investments and stewardship at Scottish Widows
This article was originally published on LinkedIn and is reproduced with kind permission